LIMITED LIABILITY COMPANY
Like a corporation, a limited liability company upholds limited liability features. It also ensures pass-through taxation and flexibility of partnerships in its operations
LLC owners are referred to us ‘members’. A member can be a single person (owner), two or more persons, corporations and other LLCs
The LLC members file federal tax return for facilitation of taxes unlike shareholders of corporations. This is due to the fact that LLCs are not regarded as separate entities.
FORMATION OF A LIMITED LIABILITY COMPANY
The following requirements must be adhered to when forming a Limited Liability Company,
Choosing a business name
For a name of a limited liability company to be regarded as legal, it has to correspond to …show more content…
COMBINING BENEFITS OF AN LLC WITH AN S-CORP
The status of an LLC can always be converted to being S-Corp. this must be done after comprehensive understanding of both the pros and cons of the process and consultations with your attorney. To initiate the process, form 2553 must be filed two and a half months prior to the start of the tax year of election (an election with the IRS for an LLC to be taxed as an S-Corp). Sufficient information regarding S-Corp status can be found by visiting IRS.gov
Legally, an LLC is a limited liability company but can be treated as an S-Corp for taxation purposes. When filing the election form remember to do inquiry on other election entities like the S-Corp
MERITS OF LIMITED LIABILITY COMPANIES
Consider the following merits;
• Limited Liabilities to Members; Members are ensured protection from personal liability arising from bad business decisions. If the company incurs losses or debts, the members shall not be indebted in any way to help in recovery. This means that their assets are also exempted. it is also important to note that, members’ ‘protection’ is ‘limited’ thus does not include consequences from wrongful acts, including those of other
Like a corporation, a limited liability company upholds limited liability features. It also ensures pass-through taxation and flexibility of partnerships in its operations
LLC owners are referred to us ‘members’. A member can be a single person (owner), two or more persons, corporations and other LLCs
The LLC members file federal tax return for facilitation of taxes unlike shareholders of corporations. This is due to the fact that LLCs are not regarded as separate entities.
FORMATION OF A LIMITED LIABILITY COMPANY
The following requirements must be adhered to when forming a Limited Liability Company,
Choosing a business name
For a name of a limited liability company to be regarded as legal, it has to correspond to …show more content…
COMBINING BENEFITS OF AN LLC WITH AN S-CORP
The status of an LLC can always be converted to being S-Corp. this must be done after comprehensive understanding of both the pros and cons of the process and consultations with your attorney. To initiate the process, form 2553 must be filed two and a half months prior to the start of the tax year of election (an election with the IRS for an LLC to be taxed as an S-Corp). Sufficient information regarding S-Corp status can be found by visiting IRS.gov
Legally, an LLC is a limited liability company but can be treated as an S-Corp for taxation purposes. When filing the election form remember to do inquiry on other election entities like the S-Corp
MERITS OF LIMITED LIABILITY COMPANIES
Consider the following merits;
• Limited Liabilities to Members; Members are ensured protection from personal liability arising from bad business decisions. If the company incurs losses or debts, the members shall not be indebted in any way to help in recovery. This means that their assets are also exempted. it is also important to note that, members’ ‘protection’ is ‘limited’ thus does not include consequences from wrongful acts, including those of other